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There are several exciting things about Consumer Driven Health Care plans that are proving to reduce costs. One of the best things is pricing transparency.

HSA consumers here in the Kansas City area (and nationwide beginning in October with over 1500 new blood draw locations) have access to special pricing for lab work. Show them your HSA debit card and you can save 10% off your already discounted lab tests!

Since this blog is dedicated to offering the most up-to-date Health Savings Account information, we want to make sure you maximize your HSA for 2010. Remember, if you were covered by an HSA qualified High Deductible Health Plan (HDHP) on or before December 1st, 2010 then you have until you file your taxes (or April 15th 2011) to finish up your 2010 contributions and get a 2010 tax deduction.

These maximum contributions will not be pro-rated if your HSA qualified health insurance plan (HDHP) was either in force all 12 months of 2010 OR if it was in force by December 1st of 2010 AND remains in force all 2011.

Your tax deduction is based on how much you DEPOSIT into your HSA, not how much you spend.

You are required to keep receipts of your eligible expenses in case the IRS audits you. You can choose to reimburse yourself at a later date up to the medical receipts you have accumulated without being subject to 20% penalty or taxable income.

The triple-tax advantages (tax deductible deposits, tax free interest earned, and tax free withdraws for eligible medical expenses) only available with HSAs make them an important tax planning tool that is unmatched when used properly.

Other statistics show that nearly half of the 10 million Americans covered by the required HDHP insurance plans have not established their HSA account, and therefore are not participating in the tax savings they offer. Although OFM Benefits is one of the nation’s premier HSA focused insurance agencies, there are probably some of you that have procrastinated setting up your account. If you have been covered by your HDHP before or on December 1st, 2010 and haven’t set up your HSA, it’s not too late!

OFM is proud to recommend HSA Bank because of their great combination of low fees, competitive interest rates, and a large number of investment options. With over 350,000 HSA accounts and over $1 billion in HSA deposits, HSA Bank has established themselves as one of the nations leading HSA administrators. They also recently eliminated all setup fees.

As many Americans are facing huge health insurance premium increases and revenue decreases, HSA qualified plans are becoming even more popular. The average household pays over $13,000 per year for health insurance premiums! We feel HSA qualified plans offer the best value in healthcare today.

If you are self employed or a business owner and would like to receive the premium savings and tax deductions only available with HSAs, please visit www.missionHSA.com

The AFL-CIO’s criticism of the position McCain took on State Children’s Health Insurance Program (SCHIP) is interesting. SCHIP is supposed to provide additional government funded (Medicaid) health insurance for the poor, right?

Then how come the definition of “poor” could be up to $62,000 of annual household income? This would have required already short state budgets to fund Medicaid well into middle-income earning families. It would have also ended up moving a tremendous number of privately insured children into Medicaid. “Why pay for it if the state offers it for free?” Most states couldn’t afford to match the federal funding requirement in the SCHIP bill anyway. I can’t blame McCain for voting against it. That was bad legislation.

This is the part of the Peoples Weekly World article that I need someone to explain to me…

How can AFL-CIO Political Action Director Karen Ackerman claim, “that employers would use these individual medical savings accounts as an excuse to dump health care plans workers fought for decades to win..”?

I know of many people that thought they had good health insurance because their deductible was low. The insurance deductible is only part of the “out-of-pocket” equation. There are actually three moving parts, the deductible, co-insurance (the 80/20 part) and, of course, co-pays. Most health insurance policies don’t count co-pays towards the “out-of-pocket maximum”. If there is a cancer or serious heart issue or organ transplant you can plan on paying thousands of dollars in co-pays in excess of your “out-of-pocket maximum” deductible and co-insurance. These co-pay plans shouldn’t be able to use the words “out-of-pocket maximum”.

My last blog, “Do Co-Pays Really Make Sense???” speaks on this issue further. HSA qualified health insurance plans when implemented properly offer both healthy people and high utilizers excellent value.

Have any of you Union employees been unfortunate to have suffered through a life threatening incident such as cancer or an organ transplant? How much total medical expenses did you have to pay including all co-pays. Would you rather have had an insurance plan like the City of Iola, KS (way to go Judy!)? They have a $1500 deductible 100% comprehensive major medical health insurance plan that saves the city enough premiums to fund each employee with $700 per year into their HSA. Do the math: $1500 – $700 = TERRIFIC HEALTH INSURANCE PLAN!

And for the employees that don’t spend their $700 HSA, they keep it!

Go to Blue Cross, Coventry, Aetna, Cigna, Humana, United Health Care, or any other health insurance company and tell them you want to purchase a health insurance plan that has a total out-of-pocket risk in any calendar year of $800 including all inpatient, outpatient, testing, prescription drugs, EVERYTHING!

You can’t buy a better health insurance plan than a properly designed and funded HSA plan.

So why do HSAs seem to upset Labor Unions? I fail to believe it has anything to do with the HSA itself. It has to be politically motivated, because financially, HSAs make sense.

General Motors and Ford spend more money on health insurance per car than they spend on steel. This huge expense has allowed Toyota to surpass GM as the largest auto manufacturer in the world. GM had owned that spot for 75 years. Unfortunately trying to hang on to old inefficient health insurance plans will keep GM out of the top spot. Labor Unions need better quality health care that costs less.

“The state is saving, too. In a time of severe budgetary stress, Indiana will save at least $20 million in 2010 because of our high HSA enrollment. Mercer calculates the state’s total costs are being reduced by 11% solely due to the HSA option.”

Why is it that we look at health insurance so much different than any other type of insurance we purchase? Does our auto insurance cover oil changes and windshield wiper blades? Does our homeowners insurance cover our washer/dryer or furnace? Why is it we expect health insurance to cover every minor expense? The problem with our current health insurance system lies in how the services are delivered. What else in our free-enterprise society today is delivered in a “copay” system? Imagine buying a car and paying a $200 copay with someone else paying the rest. Would any of us be driving the same car we are today? Of course not! No wonder health care now consumes over 16% of our total GDP which is 60% more than Americans spend on housing!

With skyrocketing health insurance premiums companies such as Mega Life and Health can easily sell these limited policies to people because they get insurance that includes copays for doctor’s office visits and some prescription drug coverage at a much lower premium than comprehensive major medical plans.

There needs to be a change in vocabulary in order for people to understand how to purchase health insurance. Most comprehensive major medical health insurance plans have 3 moving parts consisting of deductible, coinsurance, and copays. These 3 combine to represent some sort of out-of-pocket maximum that is difficult to understand. Most plans do not even count copays towards this maximum. Those plans should be described as “unlimited” out-of-pocket. Other than the new HSA qualified major medical insurance plans, which are required by IRS guidelines to have maximum out-of-pocket limitations, it can be very difficult to understand how much is covered.

This is why you should consider an HSA qualified comprehensive major medical PPO insurance plan. Once you own a qualified insurance plan you are then allowed to open a triple tax-advantaged (pre-tax deposits, tax-deferred interest earned, and tax-free withdrawals for eligible medical expenses) HSA account. You then pay your smaller bills out of your HSA at the in-network PPO discount while retaining insurance in case of a larger expense. Whatever is left in your HSA account YOU KEEP! The insurance deductible is offset by your HSA so that your total out-of-pocket maximum is usually much lower than it is with traditional plans.

I have read many of Julie Appleby’s writings and she has mentioned HSAs on many occasions. Although most health insurance brokers are hesitant to recommend HSA designs experts are still predicting 10 million HSAs will be in use by 2008. HSAs provide a vested interest in saving health care dollars for possible future expenses, or if we never spend it, keep it to help supplement retirement income (think IRA).

I just wish the people victimized in this article had been given this information.

What Is An HSA?

A Health Savings Account (HSA) is a tax-deductible account to which you can contribute to save for future medical expenses or to pay for any day-to-day, qualified medical expenses permitted under federal tax law...[More]

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